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Green Going Gone: The Tragic Deforestation of the Chaco

Monolithic agricultural companies are claiming they can practice sustainable farming in the heart of one of the world's most important wildernesses. The ravaged state of the Paraguayan Chaco forest is telling a different story.

A converted garage in Asuncion, Paraguay, seems an unlikely headquarters for the crusade to save one of Earth's last great wilderness expanses. But in a cluttered and fluorescent-lit room, three geographic information systems (GIS) analysts are hunched over their computer screens searching satellite maps for signs of fresh deforestation in South America's Gran Chaco forest, doing the best they can. "The Chaco is one of the most unknown remaining wildernesses on our planet," says Alberto Yanosky, the activist in charge of those analysts. The problem though, is that "we're losing the Chaco faster than scientists can study it."

The Gran Chaco, which cuts across parts of Paraguay, Argentina, Bolivia and Brazil, is Latin America's second most important forest, behind only the Amazon in terms of size and biodiversity. While the Amazon is a lush tropical world of wide rivers and towering trees, the Chaco, located to the south, is a dry 250,000-square-mile area with some of the highest temperatures in the world and some of the most meager rainfall.

But while the Amazon has an institutional charity system fighting for its survival, hardly anyone outside of South America has heard of the Chaco. That PR void has allowed U.S.-based agribusiness giants Cargill Inc., Bunge Ltd. and Archer Daniels Midland Co. to aggressively expand in Paraguay with a minimum of international scrutiny or outcry. Sustainable business gurus praise those companies for having saved the Amazon, and the companies themselves say they've adopted conservation policies that prove it's possible to feed the world's exploding population without putting much more land into cultivation. In Paraguay, however, the opposite has occurred. The factory farming system has advanced across the country's most fertile areas. In the last decade alone, 2.5 million acres have been turned into soybean fields, displacing subsistence farmers and cattle barons alike. (Those with the wherewithal purchased cheaper land in the Chaco forest, part of the rush that has helped make the Chaco one of the world's top deforestation hot spots.)

Last year alone, the Gran Chaco lost 914 square miles of forest, the equivalent, according to Yanosky's organization, Guyra, of 29 cities the size of Buenos Aires. During the first five months of this year, 1,040 acres — a little more than 1.6 square miles of forest a day — were bulldozed and burned in the Paraguayan portion of the Chaco. GIS analyst Fernando Palacios, a boyish 29-year-old, says it's dispiriting to watch what's happening.

"Every month we detect all these areas that have been lost," he says. "It doesn't give you much hope." Gurya sends its satellite images to members of parliament and the press, hoping to influence policy and public sentiment. But most shock about the ecological devastation has long since worn off.

What's going on in Paraguay follows a familiar pattern in countries blessed with lots of biodiversity and saddled with a struggling economy. Typically cattle ranchers are among the first to settle a virgin forest. Eventually their footpaths become dirt roads linking a once isolated area to ports and population centers. Land prices soar and pioneers sell or get pushed out by deep-pocketed farmers with access to bank loans, Big Ag financing, influential friends and high tech machinery. Once a former wilderness has been sufficiently tamed, the factory farmers often bypass the pioneers and bulldoze virgin forest themselves, going directly into commodities production. This is what's starting to happen in the Chaco.

There is one big difference: Even as deforestation shifts into hyper-drive, the U.S. agribusiness companies that set this domino effect in motion are taking victory laps on the "corporate sustainability" circuit. For instance, Cargill, the Minneapolis-based company (and the United States' largest privately-held corporation) that has spent millions of dollars to brand itself as a corporate conservationist, claims it has "figured out" how to make industrial scale agriculture environmentally sustainable. To get its Amazon farmers to go along with those sustainability efforts, it has its own satellite monitoring system that can detect even the smallest amount of fresh deforestation. Next door in Paraguay, however, small rectangles flashing on a computer screen reveal just how different the rules are outside of Brazil.

(Below: Satellite images showing deforestation in Paraguay’s Gran Chaco forest over the last three decades.)

In Guyra's makeshift space, located on an upscale residential street in Paraguay's capital city, maps of the Chaco hang on the walls and roc-n-español plays softly in the background as Palacios and his coworkers spend about two weeks every month looking for evidence of deforestation. Digital squares and rectangles indicating cleared land flash orange and hot pink on their computer screens, while what's left of the trees is represented in shades of green. A decade ago, there was a lot more green space. Now the satellite map of the Chaco has an epicenter of deforestation in the middle, surrounded by faint lines representing new roads.

Guyra (pronounced "we-rah" which means "bird" in the indigenous Guaraní language) was founded in 1997. It has a few dozen employees at its headquarters, a couple of blocks from the U.S. embassy, and a handful of other offices around the country. It's funding comes largely via donations from Paraguayan nature lovers and international organizations such as Birdlife International and the Inter-American Development Bank. Palacios and his colleagues use a tool in their computer program to highlight new cattle ranches and farms, flagging freshly cleared properties often made up of 100,000 acres or more. Many of these supersized ranches are owned by Paraguayans who sold their holdings to agribusiness farmers in the eastern part of the country, where land can run $20,000 an acre. That's a very different market than the Chaco, where prices are typically a few hundred dollars per acre. The cheap land has also attracted buyers from Brazil, Argentina and Uruguay, where world demand for beef and soybeans has also driven up rural land prices.

On a Guyra computer screen, the light-green farmland of Estancia Yerovia, located about 150 miles east of the Bolivian border, is flanked by much darker patches of virgin forest. I had heard rumors of a new soybean plantation there, deep in the central Chaco, perhaps the most remote Latin American outpost of the multinational agribusiness empire. And indeed, on the northwest corner of the screen, an area is outlined in bright red, indicating fresh deforestation.

There is, however, only so much you can tell from staring at a computer screen. So I boarded a bus that drove all day through ranchland and forest, eventually arriving in Filadelfia in the Central Chaco, an orderly Mennonite city where large homes and ample lawns give the illusion of someplace else, possibly suburban Texas. From Filadelfia, it's about a two-hour drive to Estancia Yerovia. Within a few minutes, as the last houses disappear in the rearview mirror, cropland and cattle ranches begin to fringe the roadside. At first the highway is smooth. Later, it deteriorates into a thin streak of skimpy asphalt. The potholes are as big as bathtubs.

Thorny underbrush and occasional palo santo and quebracho trees begin to crowd in. A poisonous snake, known to the locals as the jarara, crosses the hot asphalt and jabiru birds glide overhead. The temperatures are in the mid-80s, which is unusually moderate for the Central Chaco, where the heat typically soars well above 100 degrees Fahrenheit during the height of summer. Foxes, rabbits, armadillos and lizards occasionally peep out from the shoulder of the road. Eventually a dirt road at "kilometer 543," snakes off to the north, leading to a farm.

Heading toward the soybean fields, there's a queue of cargo trucks waiting to load the harvest. The soybean plants have already been sprayed with a chemical to dry them out so that the John Deeres standing by can get to work harvesting them.

An unusually wet summer has produced bumper crop — "historic," says Eduardo Aguero, the farm manager. A clean-cut agricultural engineer from Santa Rita, a soy hub in eastern Paraguay, Aguero commutes back and forth from Filadelfia each day. Aguero's employer, Cresca, S.A., is a joint venture between two Argentinean firms engaged in a sort of Big Ag real estate flipping operation inspired by the ravenous global demand for soybeans. They cleared the old growth forest here in 2009 and now have soybeans and a few other crops growing on about 100,000 acres divided into three farms. If all goes as planned, the company will sell the farms and develop another 250,000 acres of adjacent forest into soybean plantations over the next few years. A decade ago, I'm told, the land was probably worth no more than about $20 an acre. Today, Aguero says even undeveloped land in the area now sells for more than ten times that amount.

Small and yellow, soybeans go into a variety of products — tofu, soymilk and biofuels, among others — but the vast majority of world production is used for animal feed that eventually ends up on dinner tables in the form of beef, pork and chicken. "Without a doubt," says University of Illinois economist Mary Paula Arends-Kuenning, "demand for soybeans will continue to grow because of the growing middle classes in countries like China, Brazil, Russia and India where people are eating more meat." In the early 1960s, slightly less than 29 million metric tons of soybeans were grown globally each year. By the 2013-2014 growing season, production had risen to an estimated 283.8 million metric tons, according to recent USDA World Agricultural Supply and Demand estimates.

There's not much of a domestic market in Paraguay for soybeans, but producing them for export has become one of the most important drivers of the country's estimated $29.95 billion GDP. Little of South America's soy makes it directly into the United States, where high tariffs represent a major obstacle to importers. But the three biggest agricultural middlemen companies that buy the soybeans from farmers and sell them abroad are all based in the U.S.

Those companies — Cargill, Bunge and ADM — dominate the world agricultural commodities markets that feed the supply chains of a myriad of industries from food and beverages to plant-based plastics and paints. Together, the three conglomerates export the vast majority of Paraguay's crops. Worldwide, they sell most of the grains and much of the meat and other ingredients that go into the food we've all eaten. Soybeans, in a variety of forms, end up in Hellmann's Mayonnaise, Nestlé Toll House chocolate chips and Jif peanut butter. Soybeans are fed to the poultry that we later eat as McDonald's Chicken McNuggets, and soybean oil fries up KFC original recipe. Soybeans are, almost literally, everywhere.

While Cargill, Bunge and ADM aren't household names on par with Apple and Amazon, they're arguably far more important, having, along with a few other multinational traders, devised the factory-farm concept and reaping the bulk of the profits. They exert influence over farmers from Argentina to Zimbabwe, deciding where crops will expand next and who is eligible for the credit lines the companies provide to farmers to pay for seeds, fertilizer and other essentials for industrial-scale farming.

Deals for purchasing the harvest and at what price are struck even before planting. This year, Aguero says the Estancia Yerovia harvest will produce about 28.6 million pounds of soybeans. The beans have already been sold to Bunge. Last year, Aguero says, the crop went to Cargill and ADM. While all three of the companies say environmental sustainability is central to their corporate values, their vows to keep their supply chains from expanding into virgin forest apparently don't apply in the Chaco.

A tractor mows down old-growth trees in the Gran Chaco Forest in Paraguay. Courtesy of Guyra Paraguay

The Paraguay River, which runs down the middle of its namesake country, is a physical divider between two regions that might as well be two different worlds. While the Chaco is a flat and arid forest with an abundance of wildlife but hardly any people, eastern Paraguay is a lush farmscape, where 97 percent of the country lives clustered in Asuncion and a few provincial cities. It rains year-round in the east, allowing for as many as five harvests every two years. Driving down la Ruta 6 highway through this perpetual summertime world, the patchwork of cropland in green, brown and gold stretches beyond the horizon. Occasional small islands of old growth forest stand amid gently waving fields of grain.

As recently as the Seventies, this entire agricultural belt was almost all forest: el Bosque Atlántico, (the Atlantic Forest), a "biodiversity hotspot" reaching from Brazil's Atlantic coast across a broad swath of South America. Today only about seven percent of Paraguay's Atlantic Forest remains. With little public outcry, the region was transformed into cow pastures and cropland almost entirely in violation of a 1973 law requiring landowners to set aside 25 percent of each parcel as forest and preserve natural greenery around rivers and streams as a bulwark against erosion and water pollution. Cargill was the first of the Big Ag companies to establish a beachhead in Paraguay, setting up here in 1978. The company stepped up investments here a decade ago, breaking ground on a major soybean processing and export plant, Puerto Unión, in 2006. That was the same year that Cargill, along with the other two big grain traders, signed a voluntary moratorium on purchasing soybeans from Brazilian farmers growing the crop on freshly deforested Amazon land. Three years later, it extended sustainability commitments company wide, issuing "guiding principles," a set of commitments to "practices that create a balance between production and social and environmental questions."

While the company has been rightly lauded for its Amazonian initiatives, in Paraguay, however, it appeared that those guiding principles were not in effect. Cargill's new Puerto Unión port opened in 2011, consolidating the company's position as Paraguay's biggest crop exporter, commercializing an annual 1.4 million tons of soy, about 30 percent of the country's harvest. Since then ADM and Bunge have also opened new soybean crushing plants, more than doubling the country's capacity to process the crop each year.

The massive scale of this U.S.-style of agribusiness means farming in Paraguay looks much the way it does in, say, Iowa. "It really follows the principals of industry," says Timothy Griffin, a professor of nutrition science and policy at Tufts. "You bring together a set of inputs and use them to produce as much output as you can." In the process, Griffin explains, the land "goes from a complex ecological system to about the simplest ecological system that you could envision." Water pollution from chemical runoff and erosion, says Griffin, are "much more likely to occur in those simple industrial-modeled systems than they are in a natural system."

Until running into opposition from Amazon activists, the three Big Ag companies had operated for more than a century, building vast global operations in relative obscurity. That began to change in the early 2000s when conflict in the Amazon came to a head. Cargill was building a soybean port in Santarém, an Amazon River outpost deep in the rainforest. To environmentalists, the development looked like a calculated bid to advance the Amazon's soybean frontier in Brazil. Even before it was finished, the new port was "clearly causing deforestation," says David Cleary, director of agriculture for the Nature Conservancy, who was based in Brazil at the time.

In 2006, Greenpeace pointed the finger at Cargill in a scathing report titled "Eating Up the Amazon," and sent its campaigning ship, The Arctic Sunrise, to blockade the port. They then targeted for protest McDonald's and other consumer companies that bought Cargill's soybeans. The effort achieved international attention and caught the company along with its two biggest rivals, Bunge and ADM, in an undesired spotlight. "The global response from consumers and customers," acknowledged Cargill in its corporate magazine "Cargill News," in 2010, "ranged from concern to outrage." So they decided to act.

Before 2006 was out, Cargill, ADM Bunge and the rest of the Brazilian industry signed a voluntary agreement, called the Soy Moratorium, not to purchase crops from Amazon farms that had deforested after 2006. The moratorium is still in place and has been has helped slow the Amazon deforestation rate. The company also hired the Nature Conservancy to help its Santarém-area growers come into compliance with Brazilian Forest Code, which required landowners to set off a portion of their properties as forest reserves. The Cargill News article from 2010 noted, "Santarém farmers who deforested land after 2006 could not sell their soybeans to Cargill, losing their only commercial market. Evading the moratorium on deforestation was impossible because satellite imaging technology could detect even small reductions in forest cover."

In the process, the Santarém operation was transformed from international public relations debacle into the crown jewel of Cargill's corporate sustainability program. Greg Page, executive chairman of Cargill's board of directors, told an audience at a sustainability conference that the Brazilian conservation commitments proved, "We can feed the world with very small increases in the number of acres brought into production."

When it comes to soy, however, the Amazon project has contributed only a tiny amount to Cargill's global soybean sales. Ruth Rawling, Cargill's vice president for global issues management, acknowledges that even after a decade "If you put it [the volume of sustainably grown soybeans in the Amazon] against the overall soya that we've exported from Brazil, it's pretty small. We're talking a couple of percent at most." And that's true beyond Cargill too. The Round Table on Responsible Soy — an initiative started by World Wildlife Fund that brought the three Big Ag companies together with environmentalists to create the world's first certification program for responsibly produced soy in 2011 — still has only certified a total of about three million metric tons , less than 0.5 percent of the global harvestduring the same three year period. Whatever minimal efforts to grow soy more sustainably in Brazil now exist, they are even less impressive in Big Ag's newer frontier: Paraguay. ADM says it has a sustainability program involving nearly 125,000 acres — a paltry sum when considered against Paraguay's 7.9 million of acres of soybean fields.

As for Cargill, the company does have a semblance of a sustainability program in place. Nearly 30 percent of the soybeans it buys in Paraguay are produced on land that company spokesperson Susan M. Eich says "was already in production before January 2008 and therefore was not from a protected area, reserve or forest." Eich says Cargill pays two independent companies to ensure the truth of those claims and compliance with two different international sustainable soy certification programs and to train the farmers in "best agricultural practices."

And yet it's been illegal to convert forests to cropland in the eastern agricultural belt since Paraguay passed a zero deforestation law for the entire Atlantic Forest region in 2004, which means Cargill is merely verifying that its farmers aren't blatantly breaking the law. The program's contribution to environmental sustainability in Paraguay is dubious. In fact, it may be having an opposite effect. Several observers inside Paraguay told me the pressure to preserve what little remains of the Atlantic Forest has driven up real estate prices for pastureland in that region, pushing cattle ranching into the Chaco's virgin forest. That suggests Cargill's sustainability program is one of those "true lies" common to corporate good citizenship claims; it manages to be factually correct while still in service to a larger fiction.

Similarly in Brazil, the company only reigned in farmers turning forest into fields in the Amazon, where Brazilian law enforcement officials — and Cargill's own customers — were cracking down. But Rawling says the true impact of Cargill's sustainability commitment in Brazil shouldn't be judged by the number of soybeans it produces but by its impact. She says the company's satellite program inspired the Brazilian government to launch its own "eye in the sky" policing technology, which it will soon expand to the entire country's agricultural production. But even though Cargill had the technology and spent the last 10 years perfecting its satellite-verified sustainability program in the Amazon, Cargill never voluntarily expanded this satellite-verified sustainability program to its growers throughout Brazil. Only now, as Brazilian officials expand satellite policing nationwide, is Cargill preparing for a day when all of its growers are in full compliance with the Brazilian Forest Code. "In years to come, "Rawling says, "we will at some point only source from farms that are registered and environmentally licensed. And not only us but the entire industry."

But Rawling also suggests that Paraguay is a uniquely difficult circumstance, and that a company needs to be able to work in concert with a given country's government in order to achieve whatever righteous environmental aims it may have. "The Paraguayan and Brazilian governments have different policies in this respect," she says about conservation, "which makes it harder — it's harder for a company to operate, to influence what's happening in agriculture if the government is going in completely the opposite direction."

On the surface, Big Ag's increased presence in Paraguay has been good for the country's economy. Soybean receipts propelled the country to a massive 13 percent growth rate last year. In January, international investors snapped up the first dollar-denominated bonds the country has issued in its 203-year history. Then, in April, the government released new figures showing that the official poverty rate fell dramatically, from 32 percent to 24 percent between 2011 and 2013, with the most dramatic decline — 45 percent to 34 percent — in rural areas. But with factory farming in the neighborhood in those regions, land prices have soared and peasants have been pushed out. There were about a quarter of a million family farms primarily in the country as recently as the Eighties. Only about 80,000 remain today.

An aerial view of the Chaco region of Paraguay. Noah Friedman–Rudovsky

Reyaldo Diaz, a lanky 20-year-old in a blue-and-red soccer jersey, is traveling aboard a creaky public bus on his way back to la Escuela Agrícola de Belén, a farm school in a region bordering the Chaco where he's one of 50 students learning how to use heavy machinery and other "agro-industry." He says his family tried its luck in the city of Ciudad del Este, near Brazil, where his older brothers still do factory work. He returned with his parents last year to the family's small farm in Concepción, one of Paraguay's poorest states, where they tend a small herd of cattle.

"We can't make it on the cattle alone," says Diaz. So they grow sesame and mandioca, a root plant that is a staple of the local diet.

Paraguay's President Horacio Cartes, who took office in August 2013, is betting the country's future on training to develop a cheap labor force that could attract manufacturing investments. (Cartes' predecessor, the leftist President Fernando Lugo, was swept from office in 2012 an impeachment carried out by the Paraguayan Congress after a conflict between police and peasants being forced off their land to make way for Big Ag soybean fields left 17 dead.) Longer term, Cartes wants to transform the nation into a college-educated "knowledge society," according Gustavo Leite, Paraguay's Minister of Industry and Commerce. Achieving "Cartes' Vision," Leite says, will depend on consolidating Paraguay's place as "a food producer for the world."

But those under 30 years of age represent Paraguay's largest demographic group, and economic experts here say it will be difficult to generate enough factory and service industry jobs for the young people abandoning subsistence agriculture in droves. (The country's rural population declined from 49.7 percent in 1992 to 35 percent in 2012.) Since agribusiness uses lots of heavy machinery but few farmworkers, a growing portion of society is scrambling to invent jobs for themselves — selling fruit on street corners, washing windshields and taking odd jobs.

An opinion poll published in May, reported three-quarters of Paraguayans disapprove of the government's performance. No doubt much of this has to do with the rampant corruption that landed Paraguay at 150 of 177 countries on Transparency Internationals' Corruption Perceptions Index. But the country's shifting economy is clearly also to blame, as its agriculture-without-people boom is stoking social tensions. A fledgling revolutionary group, the Paraguayan People's Army, made headlines last spring after kidnapping the 16-year-old son of a prominent landowner in the north of the country. Peasants in the eastern agricultural belt, meanwhile, have protested the proliferating foreign-owned factory farms and the frequent fumigations that they say are forcing them to abandon the countryside, leaving it to the genetically modified soybeans that now cover more than 7.9 million acres of Paraguay's most fertile land.

Perhaps most troublingly, President Cartes during a speech welcoming the Brazilian National Industrial Confederation earlier this year urged visitors to "use and abuse Paraguay."

Guyra estimates that by 2035 there will be no more forest in the Chaco left to cut down. "People inside the country," says analyst Palacios, "don't care much about deforestation." There are also strong disincentives in play — Guyra's office was bombed in the early 2000s, when the group first started using satellite imagery to call attention to deforestation. "People could not believe that we were able to monitor land use changes in almost realtime," Guyra executive director Yanosky says. For his efforts, Yanosky and his daughter received death threats. The culprits remain unknown.

Cargill's Rawling says the company, regardless of good intentions and its success in preserving the Brazilian Amazon, may be powerless to stop the irreversible destructive practices in Paraguay that long ago decimated so much of the world's rainforests.

"If a government is intent on opening up a lot of areas for agriculture," she says, "it may not be that easy for a company to stop that happening."

Not everyone sees it that way, however. Ironically, Big Ag concerns like Cargill hold the key to developing the country without further unsustainable environmental degradation. "They are the ones that are going to change the business," says Lucy Aquino, executive director of WWF Paraguay. "We need to focus on them." The Nature Conservancy is pressing Cargill and its competitors to agree to conservation rules for farming other ecologically sensitive South American hotspots where the soy frontier is poised to expand, and trying to expand its conservation partnership with Cargill into the Argentine Chaco and, hopefully, Paraguay.

But barring swift and radical change, and with soy cultivation having now firmly established in the Chaco, deforestation in the region looks unlikely to let up. "We often tell each other," laments Yanosky about long-ago deforestation in the Atlantic Forest, "'if we had known what was going on, we would have done something. But now," he says with a sigh, "the same thing is happening in the Chaco."

This article was reported in partnership with The Investigative Fund at The Nation Institute.